Maveron Keeps Hot Streak Alive With Zulily IPO Plans

Maveron, the venture capital firm co-founded by Starbucks Chief Executive Howard Schultz, is making a mint by focusing on consumers.

Maveron

Dan Levitan, co-founder and partner at Maveron.

The Seattle-based firm has had three of its consumer companies acquired in recent months and, with Zulily Inc. today publicly unveiling its plans for an IPO, could soon count two companies to have entered the public market in quick succession.

Those rapid-fire and potentially juicy exits will be a nice way to begin conversations with limited partners when the firm begins raising its fifth fund, a process it expects to start shortly.

Co-founded by Mr. Schultz and Dan Levitan, Maveron owns more than 23% of Zulily, a profitable flash sales site that raked in $331 million in revenue last year thanks to the mommy set purchasing limited-time deals on clothing and other goodies for themselves and their kids.

Another of the firm’s companies, sandwich restaurant chain Potbelly Corp., went public Friday, with investors pushing prices to more than double on the first day of trading. As the earliest investor, Maveron owns around 20% of the shares, which were worth around $195 million today during early trading.

Sandwiches and shopping aren’t exactly the high-tech pursuits most associate with venture capital, but for Maveron it’s a logical extension of the firm’s roots.

“The companies [Maveron backs] absolutely have technology as central to scaling, but the success or failure of the company is not based on technology–it’s on getting the psychological contract right with the customer,” Mr. Levitan said, referring to winning and keeping customers.

When Mr. Schultz and Mr. Levitan co-founded the firm in 1998, it was to bankroll the first wave of e-commerce companies, including Drugstore.com Inc. and eBay Inc.

Mr. Schultz returned to Starbucks in 2008 to lead it full time. Although he is a limited partner in Maveron and makes his connections available to startups as needed, he isn’t involved in the day-to-day operation of the firm, which now has an investment team of six and opened a San Francisco office in 2010.

Maveron’s more recent consumer plays have included Groupon Inc., beauty company Julep Inc., investing site MotleyFool.com and sportswear company Lucy.

As for Zulily, the company invested around $5 million in 2010 and sold some of its shares last year for $32.5 million. If public-market investors end up liking the company (it would be the first e-commerce site to debut since Groupon’s 2011 IPO), the company valuation should blast past the $1 billion established last year when it raised a venture round.

Other investors include Andreessen Horowitz, Meritech Capital Partners and August Capital.

Company revenue is $272 million for the first six months of 2013, or more than double the $127 million in revenue during the same period last year.

Maveron had announced closing a fourth investment fund at $240 million in April 2008, but sliced it to $120 million the following year to reflect both the slump in consumer spending and the decreasing costs to launch a startup.

Mr. Levitan confirmed Maveron is now nearing the end of that fund.

Write to Lizette Chapman at lizette.chapman@wsj.com. Follow her on Twitter at @zettewil

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